Navigating Headwinds: Performance and Prospects of the

Indian Technology Sector in 2025

I. Executive Summary
The Indian technology sector entered 2025 navigating a complex landscape
characterized by resilient underlying demand juxtaposed against significant near-term
macroeconomic headwinds. While overall IT spending within India shows robust
growth, fueled by domestic digitalization, the export-oriented IT services segment,
the sector's traditional engine, experienced mixed performance in the final quarter of
fiscal year 2025 (FY25). Major companies reported varied results, with strong deal
closures often offset by cautious revenue guidance for FY26, reflecting ongoing global
economic uncertainty and client spending rationalization.

Key growth drivers remain prominent, particularly the accelerating adoption of

Artificial Intelligence (AI), cloud computing, and broader digital transformation
initiatives. These areas fuel both domestic spending and international demand,
evidenced by strong deal pipelines reported by leading firms. However, challenges
persist, including the potential impact of global trade tensions and tariffs, managing
talent amidst skill gaps and elevated attrition, and maintaining margins under
pressure.

Compared to global benchmarks, the Indian IT sector demonstrates relative strength

in growth projections for domestic spending. However, the export-focused services
segment remains vulnerable to global economic slowdowns, mirroring pressures seen
in the technology sector worldwide. The outlook for FY26 is cautiously optimistic,
projecting a recovery in export growth led by the US market, contingent upon global
economic stabilization and the sector's ability to successfully leverage opportunities
in emerging technologies while adeptly managing persistent risks. Strategic focus on
AI capabilities, talent management, operational efficiency, and navigating the evolving
regulatory and geopolitical environment will be critical for sustained success.

II. Indian Technology Sector Overview (Post-Jan 2025)

The Indian technology landscape continues its expansionary trajectory into 2025,
underpinned by strong domestic demand and its established position as a global hub
for IT services and innovation. However, the pace and nature of growth reflect
evolving global economic conditions and technological shifts.

Market Size and Growth Trajectory

India's overall Information Technology (IT) spending is forecast to exhibit significant
growth in calendar year 2025, projected to reach $161.5 billion. This represents a
robust year-on-year (YoY) increase of 11.1%, according to Gartner. This growth builds
upon the $145.4 billion spent in 2024, which itself was a 9.8% increase over the
previous year. While the percentage growth forecast for 2025 is marginally lower than
Gartner's November 2024 estimate of 11.2%, the absolute spending projection has
increased from the earlier estimate of $160 billion. This indicates sustained
momentum in technology adoption within the country.

On the export front, which is dominated by IT services companies, India's IT exports

were projected to reach $210 billion in the 2024-25 financial year (FY25), capturing a
significant 18% share of the total global IT outsourcing expenditure. Industry analysts
anticipate a pickup in export growth for the 2025-26 financial year (FY26), forecasting
a rise to 6-7%, recovering from the more subdued 3-4% growth experienced in the
preceding two fiscal years. This recovery is expected to be primarily led by a rebound
in the crucial US market.

A noteworthy dynamic emerges when comparing the strong domestic IT spending

growth forecast (11.1% for 2025) with the more moderate, albeit recovering, export
growth projection (6-7% for FY26). Domestic IT spending encompasses a wide range
of hardware, software, and services consumed within India, reflecting vigorous
internal digitalization efforts by enterprises and government initiatives. Conversely, the
export growth figures are heavily influenced by the performance of large IT services
firms catering to global clients. The recent financial results and cautious guidance
from these major players underscore the lingering impact of global macroeconomic
uncertainties and client budget constraints on the export market. This divergence
suggests that the Indian domestic market offers a layer of resilience and growth
potential, potentially buffering the sector even if export markets face continued
near-term challenges. Companies with a balanced portfolio across domestic and
export markets may exhibit different growth characteristics compared to pure-play
exporters.

Key Segments Driving Growth

The expansion in Indian IT spending is not uniform across all segments. Software and
IT Services stand out as the primary growth engines for 2025. Spending on Software
is projected to surge by 16.9% YoY, reaching $17.9 billion, while IT Services spending is
expected to grow by 11.2% YoY to $30.1 billion. This highlights the continued focus on
application modernization, digital transformation projects, and managed services.
Furthermore, spending on Data Centre Systems is anticipated to experience
particularly strong growth, forecast at 19.1% in 2025, reaching $5 billion. This
represents a significant acceleration compared to the 10.3% growth observed in 2024
($4.2 billion spend). This surge likely reflects increased investments in cloud
infrastructure and the hardware required to support demanding workloads, including
those related to AI.

Specific technology domains are also attracting significant investment. Analysts

expect a notable boost in spending on cybersecurity, business intelligence, and data
analytics in 2025. The growing threat landscape is driving cybersecurity spending,
which is projected to surpass $3.5 billion by 2025 in India.

Emerging Technology Adoption Trends

The Indian technology sector is actively embracing and deploying next-generation

technologies, shaping service offerings and client engagements.
●​ Artificial Intelligence (AI) and Machine Learning (ML): AI is rapidly moving
from experimentation to implementation, with estimates suggesting that 75% of
Indian enterprises will integrate AI into their business processes by 2025. Major IT
firms are positioning themselves at the forefront, launching dedicated AI
platforms like Infosys Topaz (focused on generative AI solutions) and HCLTech's
comprehensive suite including AI Force (GenAI for software engineering), AI
Foundry (system integration), AI Labs (learning and consulting), and AI
Engineering (chip design). Companies like Persistent Systems are strategically
pivoting towards AI-led platform-driven services, and AI capabilities are
increasingly cited as catalysts for large deal wins.
●​ Cloud Computing: Cloud adoption remains a cornerstone of digital strategy.
Hybrid cloud models are gaining significant traction, with 62% of Indian
companies reportedly planning to implement hybrid strategies. IT service
providers are facilitating this through platforms like Infosys Cobalt (for cloud
transformation orchestration) and strong partnerships with major hyperscalers
including Google Cloud, Microsoft Azure, and Amazon Web Services (AWS).
●​ 5G and Internet of Things (IoT): The ongoing rollout of 5G networks across
India is enhancing connectivity and acting as an enabler for IoT adoption. The 5G
market in India is projected to contribute significantly to the economy, potentially
adding $17 billion by 2025. Companies like Tech Mahindra are actively focusing on
delivering IT services and solutions tailored for the telecom sector, including 5G
technology.
Investment Climate

The investment landscape for the Indian technology sector presented a mixed picture
in early 2025. India solidified its position as a leading global Initial Public Offering
(IPO) market in the first quarter (Q1) of 2025, accounting for 22% of global IPO activity
with 62 listings that raised a total of $2.8 billion. The technology sector's appeal was
underscored by the largest IPO during this period belonging to Hexaware
Technologies Ltd., which successfully raised $1.0 billion.

However, this activity occurred against a backdrop of moderated investor sentiment.

Overall IPO activity in India witnessed a decline of approximately 20% in Q1 2025
compared to the same period in 2024. This caution was mirrored by a slight decrease
in the BSE SENSEX index during the quarter.

Contrasting with the moderated public market activity, the Mergers and Acquisitions
(M&A) market demonstrated remarkable strength. Q1 2025 saw record-breaking M&A
deal volumes in India, indicating strong investor confidence and strategic investment
activity. This suggests that while accessing public markets became more selective,
companies and investors continued to pursue growth and transformation through
strategic acquisitions. Infosys's acquisition of in-tech Holding GmbH, specializing in
Engineering R&D services, exemplifies this trend. The juxtaposition of robust M&A and
somewhat subdued IPO activity could signify a phase where established players are
focused on strategic consolidation, capability acquisition (like specialized engineering
or AI skills), and market repositioning, potentially viewing these routes as less
susceptible to short-term public market volatility than launching an IPO.

III. Performance Analysis of Major Indian Technology Companies

(Q4 FY25 & Full Year FY25)
The financial performance of India's leading technology companies during the fourth
quarter (Q4) and the full fiscal year 2024-25 (FY25) reflected the broader sector
dynamics – resilience in securing large deals offset by macroeconomic pressures
impacting revenue growth and profitability for some. Management commentary
across the board highlighted a challenging operating environment but also expressed
confidence in long-term fundamentals.

Tier-1 Company Deep Dive

●​ Tata Consultancy Services (TCS): As India's largest IT services firm, TCS reported
Q4 FY25 consolidated revenue of ₹64,479 crore, marking a 5.3% YoY growth.
However, net profit saw a slight decline of 1.7% YoY, reported as ₹12,293 crore or
 ₹12,224 crore. For the full fiscal year FY25, TCS crossed the significant $30 billion
revenue milestone, reporting total revenue of ₹2.55 lakh crore (approximately
$30.18 billion), a 6.0% YoY increase. Full-year net profit grew robustly, reported at
₹48,797 crore (+5.9% YoY) or ₹48,553 crore (+5.8% YoY). The company
maintained healthy margins, with Q4 operating margin at 24.2% and net margin at
19.0%. A key highlight was the record Total Contract Value (TCV) secured in Q4,
amounting to $12.2 billion, bringing the full-year TCV to $39.4 billion. TCS declared
a final dividend of ₹30 per share, resulting in a total dividend of ₹126 per share for
FY25. Its market capitalization stood around ₹14.6 trillion or ₹12.5 trillion in early
2025, with a high Return on Equity (ROE) of 51.5%.​
Growth in Q4 was primarily driven by regional markets, particularly India which
saw 33% YoY growth. The Banking, Financial Services, and Insurance (BFSI)
vertical also contributed positively (+2.5% YoY Q4). However, performance was
dragged down by persistent weakness in the crucial North American market
(-1.9% YoY Q4) and year-on-year declines in consumer business, life sciences,
healthcare, and manufacturing segments. Management attributed the
performance nuances to macroeconomic uncertainties, tariff-related issues
impacting client budgets in the U.S., and project ramp-downs, while emphasizing
the company's ability to deliver profitability and strong cash flows in a challenging
environment. Strategically, TCS continues to focus on AI, Cloud, and
Cybersecurity, serving key clients like Citibank, General Electric, and Microsoft.
The company ended FY25 with a headcount of 607,979, adding 625 employees in
Q4, while the Last Twelve Months (LTM) attrition rate stood at 13.3%. TCS also
continued its focus on innovation, applying for 267 patents in Q4.
●​ Infosys: Infosys reported Q4 FY25 revenue of ₹40,925 crore, up 7.9% YoY.
However, net profit declined significantly by 11.8% YoY to ₹7,038 crore. For the full
year FY25, revenue reached ₹162,990 crore (+6.0% YoY), translating to $19.28
billion (+3.9% YoY). Full-year net profit saw a modest increase of 1.9% YoY to
₹26,750 crore. Q4 operating margin was reported at 20.1% or 21.0%. While the
company achieved its highest-ever large deal TCV for the full year at $17.7 billion,
the Q4 TCV of $2.6 billion was notably lower than the $4.5 billion recorded in Q4
FY24. Infosys announced a final dividend of ₹20 per share plus a special dividend
of ₹8 per share. The company issued cautious guidance for FY26, projecting
revenue growth between 1-3% in constant currency (CC) terms (or 0-3% CC) and
maintaining its operating margin guidance band at 20-22%. Its market
capitalization was approximately ₹7.8 trillion with an ROE of 33.1%.​
The Q4 performance, particularly the profit decline and revenue growth falling
short of some analyst expectations, highlighted ongoing sector challenges. Key
verticals like Financial Services (-8.5% YoY CC Q4) and Retail (-3.7% YoY CC Q4)
 experienced declines. Factors cited included delayed client decision-making and
reduced discretionary spending. Margin contraction was also a factor, partly due
to wage hikes implemented earlier. Strategically, Infosys is heavily focused on
Generative AI through its Topaz platform and cloud transformation via its Cobalt
platform. Key clients include Aimia Inc., Ricoh Americas Corporation, and Kraft
Foods Group. The company expanded its capabilities through the acquisition of
German Engineering R&D firm in-tech Holding GmbH. Despite hiring caution
across the industry, Infosys increased its overall headcount during FY25 and
reported its highest-ever free cash flow (FCF) in Q4 FY25 at $848 million.
Management commentary emphasized the record annual deal value as a
reflection of client trust.
●​ Wipro: Wipro presented a mixed Q4 FY25 performance. Revenue figures varied
slightly across sources, reported as ₹22,208 crore (+3.4% YoY) or ₹22,504 crore
(+1.3% YoY). Net profit showed stronger growth, reported as ₹3,145 crore (+5.2%
YoY) or ₹3,570 crore (+25.9% YoY). For the full year FY25, revenue saw a slight
decline of 0.7% YoY to ₹89,088 crore (approximately $10.51 billion), while net
profit surged by 18.9% YoY to ₹13,135 crore. Q4 IT Services operating margin
remained stable or improved, reported at 16.4% or 17.5% (an expansion of 1.1%
YoY). Large deal bookings were strong in Q4 at $1.76 billion, up 48.5% YoY in CC
terms. However, Wipro issued cautious guidance for Q1 FY26, expecting a
sequential revenue decline of (-)3.5% to (-)1.5% in CC terms. The interim dividend
of ₹6 per share declared earlier was designated as the final dividend for FY25.
Wipro's market cap was around ₹3.3 trillion.​
The company described its Q4 performance as stable, driven by disciplined
execution. Margin expansion was achieved despite the softening revenue
environment, attributed to strategic cost optimization initiatives. Significant
momentum was observed late in the quarter with two mega deal wins and growth
in top accounts. However, performance was impacted by weak discretionary
spending and global economic uncertainty. The CEO also explicitly mentioned
uncertainty related to potential US tariffs, noting that a large transformation
project was paused by a client during the quarter due to these concerns. Wipro's
strategic focus includes accelerating AI-driven solutions, expanding consulting
services, and optimizing costs. Key clients include Unilever, Coca-Cola, and HSBC.
Wipro also saw a slight increase in headcount during FY25, with LTM attrition at
15.0%. Management commentary highlighted execution rigor, margin expansion,
and robust cash flow generation.
●​ HCL Technologies (HCLTech): HCLTech reported strong growth metrics,
positioning itself as the fastest-growing among large peers for the second
consecutive year. Q4 FY25 revenue was ₹30,246 crore, up 6.1% YoY, while net
 profit rose 8% YoY to ₹4,307 crore. For the full year FY25, revenue grew 6.5% YoY
to ₹117,055 crore (approximately $13.84 billion, +4.3% YoY), and net profit
increased by 10.8% YoY to ₹17,390 crore. The Q4 EBIT margin stood at 18.0%,
contributing to a full-year EBIT margin of 18.3%. HCLTech secured a strong TCV of
$3.0 billion in Q4, bringing the FY25 total to $9.27 billion. The company guided for
FY26 revenue growth of 2-5% in CC terms, with an EBIT margin target of 18-19%.
An interim dividend of ₹18 per share was declared for Q4, bringing the total FY25
dividend to ₹60 per share, representing a high payout ratio of 93.5%. HCLTech's
market cap was approximately ₹4.7 trillion, with an ROE of 23.69%.​
Growth was supported by the services business (+0.7% QoQ CC in Q4) and
particularly strong performance in Digital services (+8.6% CC for FY25). The
HCLSoftware segment also showed accelerating growth, with its Annual
Recurring Revenue (ARR) reaching $1.03 billion (+1.8% CC YoY). While Q4 revenue
slightly missed some analyst estimates, the CEO highlighted healthy services
growth amidst volatile market conditions and attributed the strong Q4 bookings
partly to the company's AI propositions. Regarding tariffs, the CEO stated no
specific impact had been observed yet, but acknowledged potential risks across
industries if they escalate. HCLTech's strategic priorities include AI, Cloud, and
Digital services. Key clients listed include Cisco, AMD, and CA Technologies. The
company ended FY25 with 223,420 employees; the net headcount decreased by
4,061 YoY primarily due to a business unit divestiture, although 7,829 freshers
were added during the year. LTM attrition rose slightly to 13.0% from 12.4% YoY.
Management emphasized disciplined execution and robust cash generation.
●​ Tech Mahindra: Tech Mahindra reported a significant jump in Q4 FY25 net profit,
which rose 76.5% YoY to ₹1,167 crore. Revenue for the quarter increased by 4.0%
YoY to ₹13,384 crore. For the full year FY25, revenue grew 1.9% YoY to ₹52,988
crore (approximately $6.26 billion), while net profit saw a remarkable 80% YoY
increase to ₹4,253 crore. The surge in profitability was attributed to margin
expansion and a lower effective tax rate due to one-off benefits. Q4 EBIT margin
improved significantly to 10.5%, up 320 basis points YoY. The company secured a
TCV of $798 million in Q4, contributing to a full-year TCV of $2.7 billion, up 42%
YoY. Tech Mahindra recommended a final dividend of ₹30 per share, taking the
total FY25 dividend to ₹45 per share. Its market cap was around ₹1.65 trillion.​
Growth drivers in Q4 included the Retail, Transport & Logistics, and BFSI verticals.
However, the Manufacturing vertical showed weakness, declining 5.5% YoY in Q4.
The CEO acknowledged that market volatility, particularly since January 2025 and
impacting the manufacturing sector, has materially changed the operating
environment and affected the company's turnaround plans. While FY25 targets
were largely met, the CEO indicated that achieving normalized industry growth
 looks difficult in the near term, reinforcing a focus on margin targets set for FY27.
Tech Mahindra's strategic focus areas include 5G, telecom solutions, blockchain,
and AI, serving clients like AT&T, British Telecom, and Microsoft. The company's
headcount stood at 148,731 at the end of Q4 FY25, up 2.9% YoY, with an LTM IT
attrition rate of 11.8%. Management commentary highlighted the laying of a
strong foundation for transformation, operational excellence leading to profit
growth, and strong deal wins validating client partnerships.

Table 1: Tier-1 Indian IT Company Financial Scorecard (Q4 FY25 & FY25)

Co Q4 Q4 Q4 Q4 FY2 FY2 FY2 FY2 Q4 Q4 FY2 FY2

mp FY2 FY2 FY2 FY2 5 5 5 5 Op. TC 6 6
any 5 5 5 5 Re Re Net Net /EB V Re Ma
Re Re Net Net ven ven Pro Pro IT ($B ven rgi
ven ven Pro Pro ue ue fit fit Ma ) ue n
ue ue fit fit (₹ YoY (₹ YoY rgi Gui Gui
(₹ YoY (₹ YoY Cr / Gro Cr) Gro n da da
Cr) Gro Cr) Gro $B) wt wt (%) nce nce
wt wt h h (C (%)
h h (%) (%) C
(%) (%) %)

TC 64, 5.3 12,2 -1.7 255 6.0 48, 5.9 24. 12.2 N/A N/A
S 479 93 / ,32 797 / 2
12,2 4/ / 5.8 (Op
24 30. 48, )
18 553

Info 40, 7.9 7,0 -11. 162, 6.0 26, 1.9 20. 2.6 1-3 20-
sys 925 38 8 990 750 1 / 22
/ (Op 0-3
19.2 )/
8 21.
0
(Op
)

Wip 22, 3.4 3,14 5.2 89, -0. 13,1 18.9 16. 1.76 Q1: Mai
ro 208 / 1.3 5/ / 088 7 35 4 (La (-)3 ntai
/ 3,5 25. / (IT) rge .5 n
22, 70 9 10. / ) to nar
50 51 17.5 (-)1 row
4 (IT) .5 ban
(Se
 q) d

HC 30, 6.1 4,3 8.0 117, 6.5 17,3 10. 18. 3.0 2-5 18-
LTe 246 07 055 90 8 0 19
ch / (EB
13.8 IT)
4

Tec 13,3 4.0 1,16 76. 52, 1.9 4,2 80. 10. 0.8 N/A Foc
h 84 7 5 988 53 0 5 0 us
Ma / (EB on
hin 6.2 IT) FY2
dra 6 7
tar
get

Note: Variations in reported figures (e.g., TCS/Wipro profit) reflect differences in

source reporting. TCV figures represent Total Contract Value booked in the quarter.
Guidance figures are as reported by companies.

Performance Summary of Other Significant Players

Beyond the top five, several other Indian technology companies play significant roles
in the ecosystem, often specializing in high-growth niches.
●​ LTIMindtree: Formed from the merger of L&T Infotech and Mindtree, this
company holds a significant market capitalization of approximately ₹1.7 trillion. It
focuses on cloud computing, AI, and fintech solutions, serving major clients like
Chevron, Hitachi, and Lufthansa. Analysts anticipated potential margin
improvement for LTIMindtree in Q4 FY25. It has demonstrated strong long-term
investor returns, with a 5-year return around 197% as of early 2025.
●​ Persistent Systems: Persistent Systems delivered strong results in Q4 FY25, with
net profit rising 25.5% YoY to ₹396 crore and revenue surging 25% YoY to ₹3,242
crore. This marked its 20th consecutive quarter of revenue growth. The company
announced a final dividend of ₹15 per share, bringing the total for its 35th
anniversary year to ₹35. Q4 TCV stood at $517.5 million. With a market cap around
₹0.93 trillion, Persistent focuses on software product engineering and is
strategically pivoting to AI-led platform services, leveraging partnerships like the
one with Google Cloud. It was highlighted as a top performer based on 5-year
stock returns.
●​ L&T Technology Services (LTTS): A subsidiary of the L&T group, LTTS
 specializes in digital engineering and R&D services, focusing on AI, IoT, digital
manufacturing, and smart engineering. Its key revenue segments are Mobility,
Sustainability, and Hi-Tech. LTTS collaborates with major tech players like
Microsoft Azure, Google Cloud, Intel, and AWS. Its market cap was approximately
₹0.58 trillion in early 2025. While LTTS reported strong Q4 revenue growth of
17.5% YoY to ₹2,982 crore, analysts had expected some margin pressure in the
quarter due to acquisition integration (Intelliswift) and seasonality.
●​ Coforge: With a market cap around ₹0.56 trillion, Coforge focuses on AI, cloud
computing, data analytics, and digital workflows, particularly in sectors like
banking, healthcare, and aviation. It maintains partnerships with ServiceNow and
Microsoft. Analysts expected margin improvement for Coforge in Q4 FY25, and
the company has shown strong 5-year stock returns.
●​ Oracle Financial Services Software (OFSS): This company, with a market cap
near ₹0.80 trillion, specializes in software solutions for the BFSI sector, including
fintech applications and AI-powered risk management and fraud detection
systems. It boasts a strong global presence and has delivered significant 5-year
returns for investors.
●​ Mphasis: Valued at around ₹0.54 - ₹0.57 trillion, Mphasis concentrates on cloud
solutions and Generative AI, partnering with major platforms like AWS, Salesforce,
and Adobe.
●​ Other Notable Companies: The Indian IT landscape includes numerous other
important players such as Tata Elxsi (design & technology services), KPIT
Technologies (automotive software), Happiest Minds Technologies (digital
transformation, GenAI), Cyient (engineering & technology solutions), Zensar
Technologies (digital engineering, cloud), and Sonata Software (cloud
modernization, Microsoft solutions). The successful $1.0 billion IPO of Hexaware
Technologies in Q1 2025 also underscores the continued investor interest in
established mid-tier players.

Table 2: Tier-2 Indian IT Company Financial Highlights (Select Q4 FY25 Data)

Company Market Cap Q4 FY25 Q4 FY25 Profit Key

(Approx. ₹ Cr, Revenue Growth (YoY Specialization/
Early 2025) Growth (YoY %) Focus Area
%)

LTIMindtree 1,716,350 N/A N/A Cloud

Computing, AI,
Fintech
 Solutions

Persistent Sys. 930,360 25.0 25.5 Software

Product
Engineering,
AI-led Services

LTTS 581,810 17.5 N/A Digital

Engineering, AI,
IoT, Smart
Manufacturing

Coforge 561,540 N/A N/A AI, Cloud, Data

Analytics, Digital
Workflows

OFSS 802,890 N/A N/A BFSI Software,

Fintech, AI-Risk
Management

Mphasis 546,820 / N/A N/A Cloud Solutions,

569,440 Generative AI

Note: Market Cap figures are indicative based on data from early 2025. N/A indicates
data not readily available in the provided snippets for the specific period.

Analysis of Human Capital Trends

Talent remains a critical determinant of success and a significant area of focus for
Indian IT companies, presenting both challenges and opportunities.
●​ Hiring: The overall approach to hiring in early 2025 was marked by caution.
Despite this, there were commitments to significant fresher intake. Following a
pickup in the second half of 2024, the top four IT majors had committed to
recruiting around 82,000 fresh graduates, with projections suggesting the sector
could surpass 150,000 fresher hires in FY25. Talent solutions firm NLB Services
projected a 15-20% growth in overall IT job opportunities in India for 2025.
HCLTech, for instance, aimed to hire at least 2,000 freshers quarterly. However,
this intake contrasts with the simultaneous surge in demand for highly specialized
tech roles (AI/ML, Data Analytics, Cloud, Cybersecurity), expected to grow by
30-35%. TCS management explicitly denied that AI adoption was negatively
 impacting overall hiring volumes at their company.
●​ Headcount: The net headcount changes at the end of FY25 were mixed across
the top tier. TCS, Infosys, Wipro, and Tech Mahindra reported net additions (YoY
or QoQ), indicating some level of hiring or lower attrition offsetting departures.
HCLTech, however, reported a net reduction of 4,061 employees year-on-year,
primarily attributed to the divestiture of certain business units.
●​ Attrition: Attrition rates remained elevated or saw slight increases in Q4 FY25
compared to the previous year for several major players. TCS reported LTM
attrition at 13.3%, Wipro at 15.0%, HCLTech at 13.0% (up from 12.4% YoY), and
Tech Mahindra at 11.8%. Increased competition for talent, including from the
growing number of Global Capability Centers (GCCs) setting up in India, was cited
as a contributing factor. Cognizant and Infosys subtly acknowledged this
competitive pressure.
●​ Salaries/Hikes: Driven by the focus on profitability amidst market uncertainty,
companies exercised caution regarding salary increases. Hikes were expected to
be smaller or potentially delayed in the current fiscal year compared to previous
cycles. While HCLTech maintained its traditional October hike cycle, Tech
Mahindra implemented delayed revisions in the Jan-Mar 2025 quarter.
●​ Utilization: To counteract slowing revenue growth and protect margins,
companies pushed for higher employee utilization rates, moving from historical
norms of 70-75% towards targets of 80-85%. Infosys reported utilization at 82%
in Q4 FY25, indicating it was still below their desired level of 84-85%. This trend
corresponds with reports of reduced bench sizes and shorter durations for
employees between projects, potentially creating a more demanding work
environment.

The human capital landscape reveals a dichotomy. On one hand, there is intense
demand and competition for specialized skills, particularly in AI, ML, and cloud
technologies, driving projected job growth in these niches. On the other hand,
broader macroeconomic caution translates into conservative overall hiring plans,
delayed or smaller salary hikes, and increased pressure on employee utilization. This
creates a critical balancing act for companies: they must invest significantly to attract,
train, and retain scarce, high-demand talent essential for capturing growth in new
technology areas, while simultaneously managing overall wage bills and operational
costs tightly due to margin pressures. The elevated attrition rates, possibly
exacerbated by high utilization demands and competition from GCCs, further
complicate this challenge. Successfully navigating this requires sophisticated talent
management strategies, including robust upskilling programs to bridge skill gaps
internally and competitive compensation structures, potentially leading to widening
pay disparities between specialized and generalist roles.

IV. Synthesis of Market News & Developments (Jan 2025

Onwards)
Monitoring key news and developments reported by credible financial sources
provides context for the sector's performance and outlook. The period from January
2025 onwards was marked by the release of Q4 FY25 earnings, ongoing discussions
about global economic factors, and continued focus on technological advancements.

Earnings Season Summary (Q4 FY25)

Financial news outlets like Moneycontrol, Economic Times, Business Standard,

Livemint, and Financial Express extensively covered the Q4 FY25 earnings season for
Indian IT companies. The overarching narrative was one of mixed results. While many
companies showcased resilience through strong TCV bookings (TCS, Infosys-FY,
HCLTech, TechM-FY, Persistent), revenue growth was often moderate, and some key
players like Infosys reported profit declines. Margin pressures due to wage hikes and
macro factors were evident, although companies like Wipro, Tech Mahindra,
Persistent, and HCLTech highlighted successes in maintaining or expanding margins. A
prevalent theme was cautious forward-looking guidance provided by management
teams, reflecting the persistent global economic uncertainty and its impact on client
spending.

Key Deals & Partnerships

Despite the challenging environment, significant deal activity continued, signaling

ongoing client investment in technology transformation. Notable Q4 deals were
announced by TCS (including clients like Cumberland Building Society, Coop Denmark,
Northern Trust), Wipro secured mega deals late in the quarter, HCLTech booked a
strong $3 billion TCV catalyzed by AI propositions, and Persistent Systems reported a
TCV of $517.5 million. Strategic partnerships were also highlighted, such as Infosys's
collaboration with LIC, Tech Mahindra's work with Microsoft and Pegatron, LTTS's
alliances with cloud providers like AWS, Azure, and Google Cloud, HCLTech's
partnership with Western Union, and the collaboration of Wipro, Tech Mahindra, and
LTTS with Nvidia, likely focusing on AI infrastructure and solutions.

Macro/Policy Impact

Global macroeconomic factors remained a dominant theme in news coverage. The

potential impact of US tariffs and broader trade tensions generated significant
discussion and uncertainty, with CEOs from Wipro and HCLTech explicitly addressing
the issue during earnings calls. Concerns about a global economic slowdown
continued to influence client behavior. Within India, potential policy offsets, such as
monetary easing or fiscal support, were discussed as mitigating factors. Attention was
also drawn to evolving international regulations, including new global tax rules
(minimum tax, country-by-country reporting) set to take effect and potential changes
to visa regulations like the US H-1B program, which could impact talent mobility for
Indian IT firms.

Sector Trends

News reports tracked key sector indicators. IT spending forecasts from Gartner
projected continued double-digit growth for India in 2025, outpacing global averages.
Export growth projections indicated a recovery trajectory for FY26. The state of India's
IPO market was analyzed, showing high activity but also signs of caution. Hiring trends
received considerable attention, with reports highlighting both the cautious overall
stance and the strong demand for specialized skills, alongside commitments to
fresher hiring. The pervasive influence of AI adoption was a recurring topic. Context
was also provided by reports on related markets, such as the near-flat performance of
the global smartphone market in Q1 2025, with India experiencing a decline.

Expert Commentary

Insights from industry analysts and company executives featured prominently in the
news flow. Gartner analysts provided forecasts on IT spending and highlighted key
investment areas like AI-ready infrastructure, cybersecurity, BI, and data analytics.
Investment strategists like Rana Gupta from Manulife offered perspectives on
navigating market volatility, the impact of tariffs, and sector-specific outlooks,
suggesting near-term headwinds for globally linked sectors like IT but potential in
consumer and financial sectors, and long-term opportunities in supply chain shifts.
HSBC analysts provided export growth forecasts. Reports also cited commentary from
talent solution firms like NLB Services on hiring projections. Crucially, the earnings
calls provided direct insights from CEOs and CFOs of the major IT firms, detailing
performance, strategic priorities, and their assessment of the market environment.

Table 3: Key News Summary & Source (Jan 2025 onwards)

Date (Approx.) News Key Details Source(s) Relevance/Imp

Headline/Topic act
Jan 2025 Gartner India IT Projected 11.1% ET, ET Sets baseline
Spending YoY growth to expectation for
Forecast 2025 $161.5B; domestic market
Software growth and key
(+16.9%), IT investment
Services areas.
(+11.2%), Data
Centers (+19.1%)
lead growth.
Focus on AI
infrastructure.

Jan 2025 HSBC India IT Projected $210B ET Provides outlook

Export Forecast exports for FY25 for
(18% global export-oriented
share); Expect services,
FY26 growth highlighting US
recovery to market
6-7% led by US dependency
market. and recovery
expectations.

Jan/Apr 2025 IT Hiring Trends NLB Services ET, Acara, AIM Highlights talent
& Projections projects 15-20% market
job growth in dynamics:
2025; High overall caution
demand vs. specialized
(30-35% surge) demand surge,
for critical for
AI/ML/Data/Clou company
d skills; Fresher strategy.
hiring projected
>150k FY25;
Caution noted in
Q4 calls.

Apr 2025 TCS Q4 & FY25 Q4 Rev +5.3%, Bajaj, Performance of

Results PAT -1.7%; FY25 INDMoney, BS, market leader
Rev +6.0% Mint reflects sector
($30B+), PAT trends: strong
+5.9%; Record deals, regional
Q4 TCV $12.2B; growth, US
Weakness in weakness,
North America; macro impact.
Cautious
 commentary.

Apr 2025 Infosys Q4 & Q4 Rev +7.9%, Bajaj, BS, FE, ET Shows pressure
FY25 Results PAT -11.8%; on profitability
FY25 Rev +6.0%, despite record
PAT +1.9%; annual deals;
Record FY25 conservative
TCV $17.7B; outlook signals
Cautious FY26 ongoing
guidance (1-3% uncertainty.
Rev growth);
Dividend
announced.

Apr 2025 Wipro Q4 & Q4 Rev Bajaj, Wipro PR, Indicates margin
FY25 Results +1.3%/+3.4%, BS, FE resilience but
PAT ongoing revenue
+25.9%/+5.2%; pressure;
FY25 Rev -0.7%, highlights direct
PAT +18.9%; impact of tariff
Strong Q4 large uncertainty.
deals; Cautious
Q1 FY26
guidance; CEO
notes tariff
uncertainty,
project pause.

Apr 2025 HCLTech Q4 & Q4 Rev +6.1%, BS, Mint, Demonstrates

FY25 Results PAT +8.0%; FY25 Upstox, FE strong
Rev +6.5%, PAT execution and AI
+10.8%; Strong leverage in deal
Q4 TCV $3.0B wins, but
(AI-catalyzed); guidance
FY26 Guidance remains
(2-5% Rev moderate.
growth);
Attrition up
slightly.

Apr 2025 Tech Mahindra Q4 Rev +4.0%, SMC, BS, NDTV, Highlights
Q4 & FY25 PAT +76.5%; TechM FS significant profit
Results FY25 Rev +1.9%, improvement
PAT +80.0%; likely aided by
Margin one-offs/efficien
 expansion; cy;
Strong FY25 TCV acknowledges
(+42%); market
Cautious headwinds.
commentary on
market volatility
impacting plans.

Apr 2025 Persistent Q4 Rev +25%, MC Shows strong

Systems Q4 & PAT +25.5%; performance
FY25 Results 20th sequential from a Tier-2
growth quarter; player
Q4 TCV $517.5M; specializing in
Dividend high-growth
announced; areas.
Focus on AI-led
pivot.

Apr 2025 India IPO Market India 22% global ET Indicates

Q1 2025 Report share ($2.8B continued, albeit
(EY) raised, 62 IPOs); moderated,
Hexaware $1B capital market
IPO; Overall interest in India,
activity down strong strategic
20% YoY; M&A activity.
Record Q1 M&A
volume noted.

Apr 2025 Global Reports on Brookings, Provides crucial

Economic/Trade increased SSGA, global context
Developments market volatility, Manulife/ET influencing
(Tariffs, policy Indian IT sector
Volatility) uncertainty performance
(esp. US tariffs), and outlook.
impact on
confidence,
potential global
slowdown, trade
fragmentation.

Apr 2025 Global Tech Reports indicate Cambonds, Shows broad

Sector Tech sector SSGA, Nasdaq pressure on the
Performance underperforman global tech
ce in US High sector, aligning
Yield index Q1 with headwinds
 and S&P 500 faced by Indian
Tech as worst IT exporters.
World sector
YTD; Nasdaq
Tech Index
down Q1.

(Note: Sources are indicative based on snippets covering the topic; specific articles
may vary. ET=Economic Times, BS=Business Standard, FE=Financial Express,
MC=Moneycontrol, AIM=Analytics India Magazine).

V. Global Comparative Analysis

Evaluating the Indian technology sector's performance and prospects requires
comparison with global trends and markets. This analysis reveals areas of relative
strength for India, alongside shared challenges and unique positioning factors.

Growth Comparison

India's domestic IT spending growth projection of 11.1% for 2025 stands out favorably
compared to global forecasts. Various sources project worldwide IT spending growth
at 9.3% or 9.8% for the same period. This suggests that internal digitalization
momentum within India is currently stronger than the global average. Key segments
like Software (+16.9%) and Data Centre Systems (+19.1%) in India show particularly
high growth rates.

However, the growth outlook for India's export-driven IT services sector (projected
6-7% recovery in FY26) appears more aligned with, or potentially slightly lagging, the
broader global recovery trends in the immediate term, reflecting its dependence on
international client spending which remains cautious. Despite this moderation, India
continues to hold a substantial share (18%) of the global IT outsourcing market. As a
point of comparison in the device segment, the global smartphone market
experienced minimal growth (0.2%) in Q1 2025, with regions like India seeing declines,
indicating saturation or weak consumer sentiment in mass-market products.

Profitability and Margins

Indian IT companies faced margin pressures in FY25, primarily attributed to wage

increases, travel costs returning, and challenging macroeconomic conditions
impacting pricing power. However, many firms demonstrated resilience through
rigorous cost management and operational efficiencies. Wipro, Tech Mahindra,
Persistent Systems, and HCLTech all reported stable or improved margins in FY25 or
Q4 FY25. This focus on profitability is a global theme, although specific margin
pressures vary by industry (e.g., multi-year low margins in downstream chemicals
impacting conglomerates like Reliance Industries). The ability of Indian IT firms to
manage margins amidst headwinds remains a key differentiator.

Risk Assessment

Both Indian and global technology sectors operated within a heightened risk
environment in early 2025.
●​ Market Volatility: Global financial markets experienced significant volatility,
driven by policy uncertainty and trade tensions. Major indices saw corrections,
and indicators like the MOVE index for Treasury volatility remained elevated. The
technology sector, often sensitive to growth expectations and interest rates, felt
this pressure acutely. The Nasdaq Technology Index (NDXT) recorded a negative
return of -7.78% in Q1 2025, a stark contrast to its strong positive performance in
2023. Reports indicated that Technology was among the worst-performing
sectors in the US High Yield bond index in Q1 and the S&P 500 Technology sector
was cited as the worst-performing global sector year-to-date by SSGA. While
Indian markets also faced volatility, commentary suggested relative resilience,
partly due to prior corrections and lighter foreign investor positioning.
●​ Geopolitical/Trade Risks: The primary global risk factor highlighted was the
uncertainty surrounding US tariffs and escalating trade tensions, particularly with
China. This uncertainty was seen denting consumer and business confidence
globally, potentially impacting investment and growth. While the direct impact on
India's economy was considered limited due to its lower export dependency on
the US (around 2% of GDP), the indirect effects through global slowdown and
client uncertainty were significant for the IT sector. Furthermore, India is seen as a
potential beneficiary of supply chain diversification efforts ('China plus one')
spurred by these tensions, although realizing this potential requires time and
investment. Potential changes to US visa policies, such as the H-1B program,
remain a specific risk for the Indian IT sector's talent mobility.
●​ Sector Performance: The underperformance of the global technology sector in
Q1 2025 indices underscores the broad-based nature of the pressures faced,
stemming from macroeconomic factors and policy uncertainty affecting demand
and valuations worldwide.

India's Global Position

Despite near-term challenges, India retains a strong position in the global technology
landscape. Its 18% share of the IT outsourcing market underscores its dominance. The
country remains a critical global talent hub, increasingly moving up the value chain
beyond traditional services towards complex areas like AI, cloud architecture, digital
engineering, and R&D. Acquisitions like Infosys's purchase of a German engineering
firm and Apple's reported plans to increase iPhone production in India for export to
the US signal India's growing role in global technology manufacturing and R&D
ecosystems.

The comparative analysis reveals a nuanced picture. While India's overall economic
trajectory might appear somewhat insulated from the most direct impacts of issues
like US tariffs due to its large domestic market and lower trade-to-GDP ratio
compared to manufacturing-heavy economies, its vital IT services sector remains
highly sensitive to global economic health and client sentiment. The headwinds faced
by Indian IT exporters – slowing growth, project delays, pricing pressures – are
directly linked to the global macroeconomic uncertainty and client spending cuts that
are also impacting the technology sector worldwide. Therefore, while India might
benefit from long-term trends like supply chain diversification, the immediate
performance of its globally integrated IT services industry is closely tied to the
fortunes of its international clients and the broader global tech environment.
Stakeholders must differentiate between India's overall economic resilience and the
specific vulnerabilities of its export-oriented IT sector.

Table 4: India vs. Global Tech Sector - Key Metrics Comparison (2025 Outlook)

Metric India Global / US

Projected IT Spending 11.1% 9.3% / 9.8%

Growth (2025)

Key Segment Growth Software: +16.9%, Services: Software & Data Centers
(Software/Services 2025) +11.2% expected double-digit growth
globally

Market Volatility Indicator Relative resilience noted; BSE High volatility; Nasdaq Tech
(Q1 2025 Perf.) Sensex slight decline Index (NDXT) -7.78%; S&P 500
-4.28%; Tech sector
underperformed indices

Key Risks Macro uncertainty, Client Macro uncertainty,

spending cuts, Talent (skill Policy/Trade/Tariff impact,
gaps, attrition), GCC Inflation, Recession risk,
 competition, Tariffs (indirect Geopolitical tensions,
impact), Visa rules Regulatory changes

Key Opportunities AI/GenAI, Cloud, Digital AI/GenAI adoption, Cloud

Transformation, Strong deal migration, Digital
pipeline, Domestic market Transformation, Data center
growth, Supply chain growth
diversification potential

Unique Positioning Factors 18% global outsourcing share, Leadership in core technology
Large talent pool, Cost innovation, Major platform
competitiveness, Growing ecosystems, Large
domestic market, Potential established markets
'China+1' beneficiary

VI. Market Dynamics: Challenges and Opportunities

The Indian technology sector operates within a dynamic global environment,
presenting a distinct set of challenges that must be navigated alongside significant
opportunities for growth and innovation.

Challenges
●​ Macroeconomic Pressures & Uncertainty: The most significant headwind
remains the persistent global economic uncertainty. Concerns about inflation,
potential recession in key markets, and volatile energy prices directly impact
client confidence and IT budgets. This translates into delays in decision-making,
project ramp-downs, and overall cautious spending patterns observed
throughout FY25 earnings calls.
●​ Tariff Impact & Trade Tensions: The imposition of US tariffs and the broader
climate of trade tensions create substantial uncertainty, even if India's direct
exposure is limited compared to other economies. This uncertainty affects client
investment plans, particularly in globally integrated sectors like manufacturing,
and disrupts supply chain planning. The potential for escalation remains a key risk
factor, explicitly cited by industry leaders.
●​ Client Spending Rationalization: As a direct consequence of macro pressures,
clients continue to rationalize spending, particularly on discretionary projects.
This leads to project cancellations or scope reductions, increased focus on cost
optimization deals, and elongated sales cycles, impacting revenue predictability
for IT firms.
●​ Talent Management: Human capital presents multifaceted challenges:
 ○​ Skill Gaps: A significant gap exists between the skills available in the
workforce and the expertise required for high-demand emerging technologies
like AI, ML, advanced cloud architecture, and data science. Bridging this gap
necessitates substantial investment in upskilling and reskilling programs.
○​ Attrition: Attrition rates remained elevated in FY25. This is driven by intense
competition for skilled talent, not only among IT firms but also from the rapidly
expanding Global Capability Centers (GCCs) of multinational corporations
setting up in India. High workload pressures stemming from increased
utilization targets may also contribute. Retaining talent requires improved
employee engagement strategies, competitive compensation, and addressing
work-life balance concerns.
●​ Increasing Competition: India faces heightened competition in the global IT
services market, both from established global players and emerging low-cost
centers. This puts pressure on traditional outsourcing models and necessitates a
continuous move towards higher-value services. The rise of GCCs also represents
a form of "insourcing" competition.
●​ Cybersecurity Threats: The digital landscape brings escalating cybersecurity
threats. The increasing frequency and sophistication of attacks demand constant
vigilance and significant investment in security infrastructure, talent, and
processes, adding to operational costs.
●​ Regulatory Landscape: Operating globally requires navigating a complex web of
regulations. Ensuring compliance with evolving data protection laws (like GDPR
and others), adapting to new international tax regimes (such as global minimum
tax and country-by-country reporting), and managing potential changes to visa
regulations in key markets like the US (H-1B) pose ongoing challenges.

Opportunities

Despite the headwinds, the Indian technology sector is presented with substantial
growth opportunities:
●​ AI & Generative AI: This is arguably the most significant long-term opportunity.
Enterprise adoption is accelerating, and global spending on AI is projected to
grow rapidly (29% CAGR 2024-28). Indian IT firms are actively capitalizing on this,
developing AI platforms, integrating AI across service lines, and leveraging AI
capabilities to win large deals. The demand for AI and ML skills is surging, creating
opportunities for talent development.
●​ Cloud Adoption: The shift to cloud continues unabated, with a strong preference
emerging for hybrid cloud models. This fuels demand for cloud migration,
modernization, management, and cloud-native development services, benefiting
 companies with strong cloud practices and partnerships.
●​ Digital Transformation & Engineering: The fundamental need for businesses
across industries to digitize operations, enhance customer experiences, and
modernize legacy systems remains a core driver of demand. Digital services
revenue streams showed strong growth for companies like HCLTech, and demand
for digital engineering capabilities is robust.
●​ Strong Deal Pipeline: Despite cautious spending, the underlying demand for
technology solutions is evident in the strong TCV and large deal wins reported by
major IT firms throughout FY25. This indicates client trust and ongoing investment
in strategic initiatives.
●​ Cost Optimization Demand: While a challenge, the client focus on cost
efficiency can also be an opportunity. Indian IT firms are well-positioned to offer
value-driven solutions, automation, and managed services that help clients
optimize their IT spending.
●​ Supply Chain Diversification: Geopolitical tensions and the desire to de-risk
supply chains are prompting global corporations to explore manufacturing and
sourcing alternatives to China ('China plus one'). India stands to benefit from this
trend in the medium to long term, particularly in electronics manufacturing and
related IT/engineering services. However, building these capabilities requires
significant time and investment.
●​ Domestic Market Growth: The robust growth projected for India's domestic IT
spending provides a significant and relatively stable market opportunity, acting as
a potential buffer against global volatility.
●​ 5G & IoT: The rollout of 5G infrastructure unlocks potential for new applications
and services related to IoT, edge computing, and enhanced connectivity, creating
opportunities for specialized providers.
●​ Cybersecurity Demand: The increasing threat landscape directly translates into
growing demand for cybersecurity services, solutions, and expertise.
●​ Resilient Verticals: Certain industry verticals, such as BFSI (for some players),
Healthcare, and Energy/Utilities, have shown relative resilience or specific growth
drivers, offering stable revenue streams and opportunities for domain
specialization.

The emergence of AI presents a particularly interesting dynamic. It is undeniably a

massive growth engine, driving new deals and shaping the future of IT services.
However, realizing this potential is not without its challenges. Successfully delivering
complex AI projects demands highly specialized and currently scarce talent,
exacerbating existing skill gaps and intensifying the war for talent. Building AI
capabilities requires significant upfront investment in platforms, R&D, and extensive
training programs, adding to cost pressures in the short term. Furthermore, the
integration of AI may necessitate fundamental changes to traditional service delivery
models and potentially impact existing job roles, requiring careful change
management. Thus, while AI offers transformative potential, it demands a strategic
overhaul of talent acquisition and development, significant investment, and
operational adaptation, all while navigating current margin pressures. The companies
that effectively manage this complex transition are likely to emerge as long-term
leaders.

VII. Outlook and Strategic Recommendations

Forward Look (FY26 and beyond)

The consensus outlook for the Indian technology sector heading into FY26 is one of
cautious optimism. While near-term uncertainties related to the global economy and
trade policies persist, underlying demand drivers remain strong. Industry growth for
the export-led services sector is projected to recover to the 6-7% range in FY26,
primarily fueled by an anticipated rebound in the US market. However, initial guidance
from major companies like Infosys (projecting 1-3% or 0-3% CC revenue growth) and
HCLTech (projecting 2-5% CC revenue growth) for FY26 reflects this caution and
suggests a potentially gradual recovery curve.

The long-term trajectory will continue to be shaped by the adoption of transformative

technologies like AI, cloud computing, and data analytics. Companies that
successfully pivot their service offerings and talent base towards these high-growth
areas are best positioned for sustained success. Key variables influencing the outlook
include the pace of global economic recovery, the resolution (or escalation) of trade
tensions and tariff policies, the ability of the industry to effectively manage talent
acquisition and retention in critical skill areas, and overall geopolitical stability.

Strategic Recommendations for Stakeholders

Navigating the current environment and capitalizing on future opportunities requires

strategic focus from all stakeholders.

For IT Companies:
1.​ Deepen AI/GenAI Capabilities: Aggressively invest in developing proprietary AI
platforms, forging strategic partnerships, acquiring niche AI firms, and building
internal expertise through intensive training and targeted hiring. Focus on
creating demonstrable business value and ROI for clients from AI
 implementations.
2.​ Strategic Talent Management: Implement comprehensive strategies to attract,
upskill, reskill, and retain talent, particularly those with expertise in AI, cloud, data
science, and cybersecurity. Address attrition proactively through competitive
compensation, meaningful career paths, enhanced employee engagement,
flexible work models, and managing workload pressures associated with high
utilization. Foster a culture of continuous learning and internal mobility to bridge
skill gaps.
3.​ Client Portfolio Diversification: While maintaining strong relationships in core
markets (North America, Europe), actively pursue opportunities in high-growth
regional markets (e.g., Middle East, Asia Pacific) and strengthen focus on the
growing Indian domestic market to build resilience. Diversify client base across
industries to mitigate vertical-specific downturns.
4.​ Operational Efficiency and Margin Defense: Continue rigorous focus on cost
optimization through automation, process improvements, and efficient resource
deployment. Maintain high utilization rates where possible, but balance this with
employee well-being to mitigate burnout and attrition. Explore value-based
pricing models for high-impact services.
5.​ Vertical Specialization: Deepen domain expertise in select high-growth or
resilient industry verticals (e.g., Healthcare IT, BFSI technology transformation,
Energy & Utilities, specific manufacturing niches) to offer differentiated,
industry-specific solutions and command better pricing.
6.​ Navigate Regulatory Changes Proactively: Invest in compliance capabilities to
stay ahead of evolving global tax regulations (BEPS 2.0, digital services taxes)
and data privacy laws (GDPR, etc.). Monitor and prepare for potential changes in
visa regulations in key markets.

For Investors:
1.​ Focus on Long-Term Fundamentals: Look beyond short-term market volatility
and quarterly fluctuations. Evaluate companies based on their strategic alignment
with long-term trends (AI, Cloud), the quality and sustainability of their deal
pipeline, management's track record of execution, the effectiveness of their
talent strategy, and their ability to defend margins.
2.​ Differentiate Based on Exposure and Strategy: Analyze individual companies
based on their geographic revenue mix (US vs. Europe vs. RoW vs. India), vertical
concentration, exposure to discretionary vs. essential IT spending, and
investments in next-generation technologies to assess relative risk and growth
potential.
3.​ Monitor Key Metrics Closely: Pay close attention to TCV booking trends and
 book-to-bill ratios, the conversion rate of deals into revenue, operating margin
trajectory, employee attrition rates, utilization levels, and management
commentary regarding guidance and market outlook during earnings calls.

For Policymakers:
1.​ Foster Talent Development Ecosystem: Support and incentivize large-scale
initiatives focused on upskilling and reskilling the workforce in emerging digital
technologies like AI, cloud, cybersecurity, and data science. Strengthen
collaboration between educational institutions and industry to ensure curriculum
relevance.
2.​ Maintain Stable and Predictable Policy Environment: Provide clarity and
long-term stability regarding taxation policies, investment regulations, and data
governance frameworks to encourage domestic and foreign investment.
3.​ Support R&D and Innovation: Implement policies and incentives that encourage
R&D investment by IT companies, particularly in cutting-edge areas like AI.
Support the development of digital infrastructure, including data centers and
robust connectivity.
4.​ Facilitate Global Integration and Address Concerns: Continue diplomatic
efforts to position India favorably as a trusted partner in global technology supply
chains. Proactively engage with partner countries to address concerns related to
trade policies and visa regulations that could impact the IT sector's
competitiveness.